Macquarie goes ahead with media fund

Confirming intentions it flagged last month, Macquarie Bank has launched an Australian Stock Exchange listed fund of media companies through which it aims to raise almost $1 billion in an initial public offering.

The fund, Macquarie Media Group (MMG), will have a mandate to acquire media assets globally, targeting companies in strong market positions with barriers to entry and the potential for improvement through future market growth, technological change and economies of scale.

It will initially be comprised of a 100 per cent shareholding in regional Australian radio stations RG Capital Radio and DMG Regional Radio, which Macquarie bought into in September last year. Macquarie indicated then that it intended to concentrate on other regional media assets outside of Australian state capitals.

Retail offers in the fund open on Tuesday, October 18, 2005, and institutional offers open on Monday November 7.

However, Macquarie plans to hold onto 20 per cent of the issued capital of MMG at listing.

The company has confirmed the offer will be priced in two instalments, with the final price of the first set by way of a book build expected to fall between $2.70 and $3.05 per stapled security.

The second instalment price will be $2.00 per stapled security, payable on the first anniversary of the allotment date of stapled securities under the offer.

Tim Hughes, a 20-year veteran of the media industry, has been appointed as MMG executive chairman.

He said the combination of partly paid securities and the fact that MMG will be ungeared at listing meant the fund was well positioned to capitalise on opportunities that met its investment criteria.